SUMMARY
The Transatlantic Trade and Investment
Partnership (TTIP) is the most ambitious trade and investment
pact ever attempted, due both to its scale—the European
Union and the United States together account for nearly half of
world GDP—and because in tackling non-tariff barriers to
trade, a deal could set the template for a new generation of 21st
century trade and investment agreements.
In this report, we examine the prospects
of the EU and US being able to conclude an agreement that fulfils
that potential, and examine the UK Government's approach to the
negotiations. We assess the prospects of making progress on flagship
issues and in areas the Government have identified as UK priorities,
and explore concerns about the possible adverse effects of an
agreement.
We conclude that, by analogy with the
Single Market programme to which the initiative has been likened,
the net and long-term effect of an agreement should be to boost
employment and prosperity among EU member states and in the US.
The initiative also has a strategic dimension, presenting an opportunity
to set a high-standard precedent for future trade and investment
agreements. It could also serve to revitalise the transatlantic
relationship, not least by establishing a permanent, structured
dialogue on regulatory matters through provisions for a living
agreement.
Our analysis suggests that it should
be possible to make progress on UK objectives in relation to the
motor industry and geographical indications. Access to US public
procurement contracts will be more difficult to obtain, particularly
at the sub-federal level, but is worth attempting, as the CETA
agreement with Canada shows. We conclude that the inclusion of
financial services regulatory matters in TTIP will be the hardest
fought of the UK's objectives, due to vehement opposition from
the US.
We observe that, insofar as a public
debate on TTIP exists, EU member states are losing it. Proponents
have yet to articulate the purpose or possible gains from TTIP
in a compelling way, or to offer convincing responses to legitimate
concerns. This task cannot be left to the European Commission
alone: we judge that EU member states, including the UK Government,
are not bearing their fair share of responsibility for transparency
and communication around the initiative. Nor should it fall to
trade ministers alone: we recommend that the UK Government should
develop a communications strategy involving ministers with sectoral
responsibilities.
We anticipate that the political backdrop
of mid-term elections in the US, European Parliament elections
and the appointment of a new European Commission will limit progress
on politically contentious issues in the negotiations until late
2014. There will then be a relatively narrow window of opportunity
to make progress on the issues that require political capital
to be spent in the first half of 2015, before the US presidential
election cycle takes over. With the US Administration yet to secure
Trade Promotion Authority, it is by no means clear that negotiators
will be in a position to seize that opportunity.
The UK Government have a pivotal role
to play in spurring on other leaders and decision-makers in order
to sustain momentum behind the initiative. We judge that they
are according priority to this in their work in the United States,
but that there is scope to do more in Brussels and other European
capitals if the Government and their allies are to take charge
of the public debate in the EU and help ensure that a new Commission
is in a position to seize the narrow window of opportunity that
may present itself next year.
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